A Harry & David employee hand-rolls cinnamon rolls in the gourmet food production area of the company, which Monday announced its new CEO, Craig Johnson. - Julia Moore

A home-grown CEO

BY GREG STILES...

Harry & David Holdings' new chief executive officer is a familiar face for many Rogue Valley residents.

Former Musician's Friend CEO Craig Johnson, who has lived in Medford for more than a decade, will run the recently reborn gift and gourmet food company headquartered on South Pacific Highway.

"The commitment to grow the company in Medford was important to me," Johnson said. "I'm in love with this valley and the folks that live here. I want to help build something in the valley."

Johnson assumes the reins of a company once synonymous with mail-order success that fell prey to greater competition and declining business-to-business gift buying during the Great Recession. The company ended a five-month tour through a Delaware bankruptcy court in September, led by Kay Hong, who has been interim CEO since February. Hong, who was hired on a temporary basis to handle the bankruptcy restructuring, will remain with Harry & David through the pivotal Christmas sales season, which traditionally provides much of the company's revenue.

Finding a CEO with retailing, manufacturing and farming experience was a difficult task, Hong said last month. Most important, however, was landing someone with significant experience in direct marketing and mature branded companies.

"Craig is the ideal candidate for this position, and we look forward to benefiting from his leadership and e-commerce, catalog and retail store expertise as we begin the upcoming holiday season and continue to implement Harry & David's strategy for achieving long-term, profitable growth," Hong said in a statement Monday morning announcing his hiring.

Johnson, admittedly has limited food experience, but he's in his element when it comes to direct sales, catalog, online and retail business.

"I've been in all those," he said. "I know fulfilment, contact center operations, all the components of marketing and merchandising and the supply chain side. I've lived in all those worlds.

"I think I bring to the table a pretty solid understanding of 99 percent of the components that make up Harry & David."

When Wasserstein & Co. axed long-time chief executive Bill Williams and hired Steve Heyer to run Harry & David in February 2010 the moved was first met with shock among community leaders. Before long, there was a general feeling of betrayal because Heyer shuttled between Atlanta and the Rogue Valley, rather than relocate to Southern Oregon.

But now Harry & David has gone local. Johnson and his family will continue living in the home they bought in 2003. His children attend Sacred Heart school.

Johnson had feared his tenure as a Rogue Valley resident was over when Bain Capital-owned Guitar Center decided last winter to relocate its Musician's Friend unit to Southern California.

Johnson had been with Musician's Friend for more than a decade and was CEO from January 2009 until September when he became chief operating officer at Gibson Guitars in Nashville, Tenn. His family stayed behind, however, while he rented an apartment.

Although his name was in the hopper for the Harry & David post, Johnson said, "Gibson seemed to be more plausible" primarily because of his background in the music industry.

But as the Harry & David CEO field narrowed, then reduced again, Johnson's name remained on the list.

"I got a call from the recruiter and he told me I was their guy and we started talking seriously," Johnson said. "There's always a little bit of thrill in moving to a city, but we have a lot of roots here."

Although he didn't know a great deal about Harry & David when he first moved to Medford in 1998, Johnson said he became very familiar with the company over the years.

"There were a lot of employees that went back and forth between Musician's Friend and Harry & David," Johnson said.

He noted Musician's Friend went through a metamorphosis and had financial challenges of its own during his tenure.

When he first went to work at Musician's Friend, catalog sales produced 85 percent of the business and online accounted for 15 percent of the revenue.

"In two years it was almost the opposite," he said.

Johnson's career path also included stops at Oriental Trading Company, Golfsmith International Holdings, Coldwater Creek, the Austad Company and Music Sound Exchange, a Time Warner company. He had the title of chief supply chain officer when he left Guitar Center for Gibson Guitar Corp.

Harry & David's new leader goes to work today, looking to take advantage of the company's new start and its cash position. His to-do list is fairly simple: "Drive top-line sales, grow our share of the market and make sure the staff enjoys coming to work and being part of the company."

One former employee at Musician's Friend characterized Johnson as a high-energy leader.

"He loves to recognize the contributions of others and then highlight how those contributions helped the business," said the employee, who asked not to be identified. "He didn't like excuses very much; he wanted to know why the business was behaving in a certain manner and wouldn't take an 'I don't know' for an answer."

Ultimately, Johnson said, businesses are successful when they grow their customer base, have talented, driven employees and innovative suppliers who provide new products.